So, as I said, if you don't want to rent a room, or get an extra job you will have to cut your outgoings. QUOTE]

And yet, you still disagree that the third option is a good one - ie. take my transfer value, take the tax-free cash, pay off all my loans, and leave the remaining fund invested in a SIPP until I retire at 65/66.

Instead of reading the predictable replies, I would rather hear from people who did what I wish I could do.

Yes, I still think stealing from tomorrow to pay for today is a bad idea. Esp if you don't cut costs as in 5 years you would be back in debt again.

And anyone who did what you want to do, probably regrets it now and won't be found here. it is obv you want someone to justify your decision but I think no one will. Good luck anyway.

Crikey, I'm nowhere near insolvency!

However....let's take that a little further, shall we?

You would say that preserving a final salary pension at all costs is the thing to do? You mean, at the expense of someone's credit history, their dignity, their well-being, their status NOW? You think that just to have extra income in 10 year's time justifies 10 years of uncertainty, financial instability and worry, just so one can shop at M&S instead of Aldi when one is retired and elderly?

Interesting proposition.

Personally, I think that all the IFAs who were quite happy to sign off such transfers in the past are running scared now of the regulator, regardless.

I have a high ATR. I am happy to take risk. I see the current economic situation in Europe as being untenable and there will be further large falls on the stock markets and a collapse in bonds, which is the next big bubble. Capital is flying away to the far east and living standards are collapsing here in the UK, if you hadn't noticed already? My wife has had a .78p pay rise in the last 3 years, and my own pay is £350 pm less than it was 3 years ago after an enforced job move.

So why shouldn't I access my TFC, invest the remaining fund where I see fit (emerging market funds, in the main, via collectives, perhaps a litle gold) and take my own risks.

.....
So why shouldn't I access my TFC, invest the remaining fund where I see fit (emerging market funds, in the main, via collectives, perhaps a litle gold) and take my own risks.

Because such an action has to be signed off by someone who can take financial responsibility to cover the possibility that you may sue the insurance company that sold you the replacement pension should the transfer prove not to have been in your best interests. eg if your investments fail and/or you lose your job leaving you with insufficient provision for your old age.

Since in most cases transfer out of a final salary scheme is financially disadvantageous it's unlikely that anyone will take the risk of your situation being different.

There have been many cases of people demanding recompense when they have made foolish investment decisions. The government, mainly via the FSA, has responded by providing safeguards. These of necessity restrict what you can be allowed to do.

Because such an action has to be signed off by someone who can take financial responsibility to cover the possibility that you may sue the insurance company that sold you the replacement pension should the transfer prove not to have been in your best interests. eg if your investments fail and/or you lose your job leaving you with insufficient provision for your old age.

Since in most cases transfer out of a final salary scheme is financially disadvantageous it's unlikely that anyone will take the risk of your situation being different.

There have been many cases of people demanding recompense when they have made foolish investment decisions. The government, mainly via the FSA, has responded by providing safeguards. These of necessity restrict what you can be allowed to do.

You're still not answering the question, though, are you?

Put it like this, then....would it be advisable for someone to access their transfer funds if the tax-free cash helped to repay all debts which therefore prevented repossession of their home, or would it be sensible to become insolvent, have their property repossessed, lose their job, just so that they can have a final salary pension in the future.

i think we both know the answer to that one. don't we?

More and more company pension schemes are going to encounter difficulties in the future. I think that this is inevitable. The recent announcement by the Government allowing pension actuaries to assume that gilt yields will rise in the future is a sign of desperation in my view. This will serve to cut transfer values now! But it wont solve the problem, as I believe that we are in for a long period of very low interest rates and rock bottom gilt yields. Pension scheme deficits will increase, in reality, and more will seek the protection of the PPF.

would it be advisable for someone to access their transfer funds if the tax-free cash helped to repay all debts which therefore prevented repossession of their home, or would it be sensible to become insolvent, have their property repossessed, lose their job, just so that they can have a final salary pension in the future.

It would not be advisable. The correct initial solution in that case is likely to be insolvency in the form of an IVA to reduce or eliminate the debts and allow for continuation of the mortgage payments using the income that is no longer being used to pay the other debts. Possibly in conjunction with a benefit payment to cover mortgage interest and/or some forbearance from the mortgage lender if the income drop appears temporary.

For those where that still can't solve the problem then bankruptcy and including the likely mortgage balance shortfall in the insolvency so that it is also eliminated is an option. Those with significant equity may be able to avoid this by downsizing or relocating to a place that is affordable within their means instead.

For those in work where insolvency isn't acceptable a debt management plan is an alternative. Though such people should have had the financial prudence to avoid getting into the mess in the first place, knowing their limited options.

After insolvency to get rid of the debts an IFA might be willing to sign off on a sufficient transfer to deal with any mortgage issues. Maybe earlier if insolvency would disallow the person from working in their normal field of work.

Quote:

Originally Posted by Gettingeven

i think we both know the answer to that one. don't we?

We know different answers. Renting shouldn't be demonised, it's entirely acceptable. The pension rules are written to block people from mortgaging their future in retirement to deal with pre-retirement imprudence or misfortune, which are better handled via insolvency and/or the benefits systems. Or by financial prudence to build up sufficient reserves so things like loss of a job won't cause hardships.

Quote:

Originally Posted by Gettingeven

The recent announcement by the Government allowing pension actuaries to assume that gilt yields will rise in the future is a sign of desperation in my view.

Gilt yields are at near-historic lows due to fiscal easing, which has reduced them from a normal 4.5% or so to 2.75% or so. It is not reasonable to assume that fiscal easing will continue indefinitely so the announcement is entirely sensible and avoids short term silliness based on exceptional circumstances.

Gilt yields are at near-historic lows due to fiscal easing, which has reduced them from a normal 4.5% or so to 2.75% or so. It is not reasonable to assume that fiscal easing will continue indefinitely so the announcement is entirely sensible and avoids short term silliness based on exceptional circumstances.

I don't agree. I think we are heading for many, many years of Japan style low interest rates, little or no economic growth and the huge risk of deflation. In fact, we are already there! Real income is being squeezed, asset values, so overpriced for so many years, are falling back to reality, and the prospect, which is the truly firghtening aspect to all of this, is that @ 80% of the government's austerity programme hasn't hit the economy yet.

In my view, house prices have further to fall, and are only propped up by low interest rates.

Read up on Japan's economic performance since the early 1990s. Interest rates have been hovering around 0% since 1994!

I don't agree. I think we are heading for many, many years of Japan style low interest rates, little or no economic growth and the huge risk of deflation. In fact, we are already there! Real income is being squeezed, asset values, so overpriced for so many years, are falling back to reality, and the prospect, which is the truly firghtening aspect to all of this, is that @ 80% of the government's austerity programme hasn't hit the economy yet.

In my view, house prices have further to fall, and are only propped up by low interest rates.

Read up on Japan's economic performance since the early 1990s. Interest rates have been hovering around 0% since 1994!

Whilst gilt yields are influenced by interest rates, they are not the only factor. QE depressed yields more than any other thing. And there is no reason to believe that QE can continue indefinitely.

I don't agree. I think we are heading for many, many years of Japan style low interest rates, little or no economic growth and the huge risk of deflation. In fact, we are already there! Real income is being squeezed, asset values, so overpriced for so many years, are falling back to reality, and the prospect, which is the truly firghtening aspect to all of this, is that @ 80% of the government's austerity programme hasn't hit the economy yet.

In my view, house prices have further to fall, and are only propped up by low interest rates.

Read up on Japan's economic performance since the early 1990s. Interest rates have been hovering around 0% since 1994!

If you are right doesnt that make your Final Salary pension even more valuable?? There is the increased likelihood that your job wont exist to put new money into your pension and the returns on your investments wont come anywhere near sufficient to provide for you in your old age.

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If you are right doesnt that make your Final Salary pension even more valuable?? There is the increased likelihood that your job wont exist to put new money into your pension and the returns on your investments wont come anywhere near sufficient to provide for you in your old age.

Possibly. Possibly not. I mean, who knows? My parents both died early 70s. In common with many elderly people, the years before they died were spent in and out of hospital with poor health. Very little opportunity to spend any money at all, had they had any!

I admit to having spent far too much time in the pub, and a smoker too, for the last 30 odd years (although I gave up the demon weed 2 years ago).

You seem to assume that people live a life that fits neatly into a grand financial plan, when most people's lives aren't like that. I've never read such nonsense in my life, all this talk about filing for IVAs, selling and renting, etc etc, when there is a large asset available that could leave me debt free without touching that part of it that will provide the pension anyway.

I have never suggested taking the pension as well, just the tax-free cash. There is no reason that I couldn't grow the remaining fund to provide a substantial pension at 65. As I say - who knows?

Hi Guys, new to forum (be gentle!) as I've been looking at cashing in my pension and after advice. I'm 58 and my private pension matures when I'm 60 in 14months time. I'm self-employed P/T at the moment and business is GRIM so was looking at taking pension early. My Q's - Do I have a right to get my pension early? Or do I have to have a medical reason? Its a Local Government Pension Scheme. I found the forum whilst looking at "pension loans" and I'm glad I did !!! Thanks

Im a serving police officer and am part of the 30 year pension scheme, i have 10 years service and due to the changes and working conditions i am looking to leave the job. The pension is looking to change in 2015 and i for one will not be signing on to a new scheme. My query is can i cash in my 10 year police pension or transfer it to a scheme i can. I am under 50 years of age also.

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